§7525 — Title 26 Internal Revenue Code | U.S. Code

Summary

Gives taxpayers the same confidential treatment for tax advice from certain IRS‑authorized tax professionals that they would get from a lawyer. That protection can only be used in noncriminal tax matters before the Internal Revenue Service and in noncriminal federal tax cases brought by or against the United States. A federally authorized tax practitioner is someone allowed to practice before the IRS and regulated under section 330 of title 31, United States Code. Tax advice means advice about matters the person is allowed to handle. The rule does not protect written communications between the practitioner and the taxpayer, the taxpayer’s officers, agents, or owners if the writing promotes the taxpayer’s participation in any tax shelter (as defined in section 6662(d)(2)(C)(ii)).

Title 26, §7525

Internal Revenue Code — Source: USLM XML via OLRC

(a)(1)With respect to tax advice, the same common law protections of confidentiality which apply to a communication between a taxpayer and an attorney shall also apply to a communication between a taxpayer and any federally authorized tax practitioner to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney.

(2)Paragraph (1) may only be asserted in—

(A)any noncriminal tax matter before the Internal Revenue Service; and

(B)any noncriminal tax proceeding in Federal court brought by or against the United States.

(3)For purposes of this subsection—

(A)The term “federally authorized tax practitioner” means any individual who is authorized under Federal law to practice before the Internal Revenue Service if such practice is subject to Federal regulation under section 330 of title 31, United States Code.

(B)The term “tax advice” means advice given by an individual with respect to a matter which is within the scope of the individual’s authority to practice described in subparagraph (A).

(b)The privilege under subsection (a) shall not apply to any written communication which is—

(1)between a federally authorized tax practitioner and—

(A)any person,

(B)any director, officer, employee, agent, or representative of the person, or

(C)any other person holding a capital or profits interest in the person, and

(2)in connection with the promotion of the direct or indirect participation of the person in any tax shelter (as defined in section 6662(d)(2)(C)(ii)).

Notes & Related Subsidiaries

Editorial Notes

Amendments

2004—Subsec. (b). Pub. L. 108–357 amended heading and text of subsec. (b) generally. Prior to amendment, text read as follows: “The privilege under subsection (a) shall not apply to any written communication between a federally authorized tax practitioner and a director, shareholder, officer, or employee, agent, or representative of a corporation in connection with the promotion of the direct or indirect participation of such corporation in any tax shelter (as defined in section 6662(d)(2)(C)(iii)).”

Statutory Notes and Related Subsidiaries

Effective Date

of 2004 Amendment Pub. L. 108–357, title VIII, § 813(b), Oct. 22, 2004, 118 Stat. 1581, provided that: “The amendment made by this section [amending this section] shall apply to communications made on or after the date of the enactment of this Act [Oct. 22, 2004].”

Effective Date

Pub. L. 105–206, title III, § 3411(c), July 22, 1998, 112 Stat. 751, provided that: “The

Amendments

made by this section [enacting this section] shall apply to communications made on or after the date of the enactment of this Act [July 22, 1998].”

§7525 Confidentiality Privileges Relating to Taxpayer Communications

Summary

Title 26, §7525

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Citations & Metadata